Health Care Law’s Job-Killing Tax Mandate

Our nation’s farmers, ranchers, and small businesses could have a pile of paperwork in their near future, thanks to – of all things – the government takeover of health care.

The new health care law signed by President Obama requires farmers, ranchers, and small businesses to file a Form 1099 with the Internal Revenue Service for every vendor or contractor from which they purchase $600 or more in goods or services in a calendar year.

In other words, when a farmer or rancher spends $600 on feed corn, seeds, fertilizer, fuel, equipment, or nearly every other expense, they will have to research and prepare a 1099 form for each and every vendor. When a shop owner pays the rent, a 1099 form will need to be sent to the landlord and then onto the IRS. A plumber who pays for lunch once a week for his employees will need to send a 1099 form to the restaurant, while at the same time receiving a 1099 form from nearly every business client.

This provision was added to the health care bill without any debate or chance for the public to weigh-in on its costs to our nation’s small businesses, farmers, and ranchers.

In addition to the hours and hours simply spent tracking down all of this information, business owners may have to purchase new software or pay for additional accounting services. Even then, this new requirement could lead to thousands of innocent mistakes resulting in penalties on the very industries which we need to help for our economy to recover.

The National Federation of Independent Businesses (NFIB) has stated this provision will have a “direct negative impact on small businesses” which lack in-house accountants and which already pay 66 percent more on tax compliance than large corporations.

The NFIB also pointed out the “1099 reporting will cost more in compliance than it will generate in revenue.”

The 1099-nightmare not only will create an administrative burden for our nation’s family farms, but also will unnecessarily increase the risk of identity theft due to the increased exchange of personal identification.

Each of the 1099 forms will contain personal information about the vendor – including social security information, payment processing information, Taxpayer Information Number, or other information which could easily be used to steal a business owner’s identity. Those who know how easily a person’s identity can be stolen because of a lost credit card should shudder at the thought of the billions of these forms being sent back and forth across the country.

It’s important we repeal this harmful provision before it begins creating economic havoc. This is why I am a cosponsor of the Small Business Paperwork Mandate Elimination Act (H.R. 5141). This bill would repeal the new 1099 requirement and provide relief for producers already burdened by the heavy hand of government. It’s a very similar bill to one being championed in the Senate by Sen. Mike Johanns and is just one step we can take to get our economy moving again.

Congress has the responsibility to find ways to get Americans back to work, stabilize our economy, and put our fiscal house in order. With nearly 10 percent unemployment, our nation’s agriculture producers and small businesses already have enough headaches. Instead of forcing job creators to track down tax forms and put their personal information at risk, we need to be enacting policies which help them create jobs.